Statewide PA

Industrywide Issues | Pennsylvania | Research | Statewide PA

PA NatGas Production 2Q16 – DUCs Shrink, Production Grows
September 6, 2016September 6, 2016

In the past we’ve been pretty critical of the Pennsylvania Independent Fiscal Office (IFO). It claims to provide revenue projections for use in the state budget process along with “impartial and timely analysis of fiscal, economic and budgetary issues to assist Commonwealth residents and the General Assembly in their evaluation of policy decisions.” It’s been our observation the IFO is populated with partisan Democrats. However, we have to acknowledge lately their analysis work, at least with regard to the Marcellus industry, has been pretty accurate (see PA Independent Fiscal Office Predicts Impact Fee Revenue for 2016). The IFO has just released another report–this one analyzing the first six months of monthly Marcellus gas production data issued by the state Dept. of Environmental Protection (DEP), comparing it with previous months and years (full copy of the IFO report embedded below). What’s obvious from the numbers is this: PA’s shale drillers are in the process of completing previously drilled but uncompleted wells (called DUCs), drawing down the number of DUCs available. The conclusion is inescapable: More drilling of new wells is on the way in PA in 2016…
Read More “PA NatGas Production 2Q16 – DUCs Shrink, Production Grows”
Beaver County | Energy Companies | Ethane | Industrywide Issues | Pennsylvania | Processing Plants | Shell | Statewide PA

Why Did Shell Choose PA for its Ethane Cracker Plant?
September 6, 2016September 6, 2016

A great article in Investor’s Business Daily explores the link between shale gas and the “explosive expansion” of the U.S. petrochemical industry. Part of the petchem supply chain is finding a cheap source of ethylene, the raw material used in making all sorts of plastics products. Manufacturers get ethylene from ethane cracker plants. The article discusses that link, and the reasons why Shell chose to locate their new multi-billion dollar ethane cracker plant near Pittsburgh. As you can guess, economics play a major role in such a decision. Here are the specific economics that convinced Shell that PA is a good bet…
Read More “Why Did Shell Choose PA for its Ethane Cracker Plant?”
Industrywide Issues | Litigation | Pennsylvania | Regulation | Statewide PA

PIOGA Loses Court Case Challenging PA DEP Standards for Permits
September 2, 2016September 2, 2016

UPDATE: PIOGA sent MDN an exclusive statement about the case. They intend to appeal. Read PIOGA’s statement below…

In 2013 a RINO justice on the Pennsylvania Supreme Court, Chief Justice Ron Castille, sold out the Marcellus industry and joined with three Democrats on the state’s high court to overturn a large and important part of the newly minted Act 13 drilling law, in a case known as Robinson v. Commonwealth of Pennsylvania (see PA Supreme Court Rules Against State/Drillers in Act 13 Case). Part of the Act 13 law was left intact, but part of it, the part that directed local municipalities to craft zoning laws to include certain statewide uniform provisions concerning the location of oil and gas operations, was tossed (see What Does PA Supreme Court Decision on Act 13 Mean?). In June of this year, the Pennsylvania Independent Oil & Gas Association (PIOGA) argued a lawsuit against the PA Dept. of Environmental Protection (DEP) based on the tossed Act 13 case. PIOGA argued that part of the Act 13 law–the part that granted the DEP sweeping power to consider proposed impacts a well might have on public and natural resources when considering whether or not to issue a permit–was no longer valid. PIOGA said those parts of the law are directly related and intertwined with the part struck down by the Supreme Court. In other words, Act 13 in its original form, as passed, said the DEP could consider impacts on public and natural resources as part of the decisional process for issuing permits, but the Supremes struck down that part of the decisional process because they said it could not be implemented consistent with Act 13’s intent. PIOGA’s lawsuit pointed out that public natural resources were still protected by other laws operators must comply with and that the Supreme Court’s invalidation of Section 3215(c) meant that DEP ould no longer impose conditions in permits related to these other laws. A Commonwealth Court in PA ruled yesterday against PIOGA’s argument (full copy of the ruling embedded below). In essence, the court is picking and choosing which parts of a law that was duly passed it wants to have enforced, and the parts it doesn’t like it willy nilly tosses, which is bass ackwards. DEP must obey the Supreme Court’s rulings just as everyone does, but not for now courtesy of the Commonwealth Court…
Read More “PIOGA Loses Court Case Challenging PA DEP Standards for Permits”
Industrywide Issues | Pennsylvania | Regulation | Statewide PA

PA Gov Wolf Searching for New DEP Sec 3 Mo After Firing Quigley
September 1, 2016September 1, 2016

Patrick McDonnell Acting Secretary, DEP

In May (three months ago), Pennsylvania Dept. of Environmental Protection (DEP) Secretary John Quigley was fired for using a PRIVATE email account to collude with his Big Green friends to try and bully PA’s legislators into supporting his onerous proposed regulations (see Smoking Gun: Copy of the Email that Got John Quigley Fired). Richly deserved. The man who took his place as Acting Secretary is Patrick McDonnell, a 19-year veteran of the DEP. We haven’t seen or heard much of McDonnell, but what we have seen and heard (via media reports) seems to be that McDonnell is a “get it done without generating controversy” kind of guy. Radical environmental groups don’t seem overly thrilled with McDonnell as Secretary (see PA’s New Acting Sec DEP: What Do We Know? Will He Be Permanent?). He is a man-made global warming flummery believer, so that’s a strike against him. But a lot of otherwise rational adults believe in such fairy tales, so we won’t hold it against him (too much). One thing is for sure: McDonnell wants to move from “Acting” to permanent Secretary of the DEP. However, it’s not looking promising that Gov. Tom Wolf will make his appointment permanent. It’s now been 90 days since Quigley was given the boot. Wolf has only 90 days to nominate someone. A common practice, when you’re not ready to nominate, is to use a placeholder name. Wolf has done so, and the placeholder name is not McDonnell’s…
Read More “PA Gov Wolf Searching for New DEP Sec 3 Mo After Firing Quigley”
Buckeye Partners | Energy Services | Industrywide Issues | Michigan | Ohio | Pennsylvania | Pipelines | Statewide MI | Statewide OH | Statewide PA

Buckeye Partners Expanding MI/OH Refined Products Pipeline, Again
September 1, 2016September 1, 2016

West to East Project Map – click for larger version

Buckeye Partners is a publicly traded master limited partnership (MLP) that owns and operates 6,000 miles of pipeline. One of those pipelines is the Michigan/Ohio refined products pipeline, which we reported on in April 2015 (see Buckeye Partners Expanding MI/OH Refined Products Pipeline East). At that time Buckeye was pushing its Michigan/Ohio Pipeline Expansion Project to expand the pipeline for “refined petroleum products” (things like gasoline, kerosene and heating oil) to run it from Woodhaven and Detroit, Michigan, and from Toledo and Lima, Ohio, to destination points in both Ohio and Western Pennsylvania. By all accounts the initial expansion was a success, because Buckeye is now conducting an open season for the second phase of the expansion project. Why talk about a gasoline/heating oil pipeline? Because it’s possible that some of the oil that gets refined into gas and heating fuel flowing through this pipeline comes from the Marcellus/Utica…
Read More “Buckeye Partners Expanding MI/OH Refined Products Pipeline, Again”
Pennsylvania | Statewide PA

Lou D’Amico Retires, PIOGA Appoints Dan Weaver Executive Director
September 1, 2016September 1, 2016

Dan Weaver & Lou D’Amico

One of the heroes of the Pennsylvania oil and gas drilling industry (and a hero to MDN editor Jim Willis) has been Lou D’Amico, president and executive director of the Pennsylvania Independent Oil & Gas Association (PIOGA). Lou is fearless, willing to speak truth to power when it comes to protecting PA’s fossil fuel industry (see PIOGA Sets Record Straight on Latest Wolf Attack re Severance Tax; PIOGA Leads the Charge to Defeat Wolf’s Severance Tax; and PA Board Adopts New Drilling Regs, PIOGA Blasts DEP “Deceptive”). In some happy/sad news, Lou is retiring from his post in running PIOGA–after 22 years. That’s the sad news. The happy news is that the very capable Dan Weaver, currently PIOGA’s public outreach director, will take Lou’s place. Welcome Dan!…
Read More “Lou D’Amico Retires, PIOGA Appoints Dan Weaver Executive Director”
Anti-Drilling/Fossil Fuel | Industrywide Issues | Pennsylvania | Regulation | Statewide PA

PA RINO Wants to Slow Marcellus Drilling with $2M Bond per Well
August 31, 2016August 31, 2016

Tom Murt – RINO

Pennsylvania State Rep. Thomas Murt, a RINO (Republican In Name Only) from the Philadelphia area, has introduced House Bill (HB) 2277 that would require drillers in the state to post a $2 million bond for each shale well they drill. The current bond is between $4,000-$10,000. This is yet another attempt by the same cast of anti-drilling characters to slow down or stop Marcellus drilling altogether in the Keystone State, by erecting regulatory hurdles to hassle drillers under the pretense of protecting PA’s environment. Adopting such a law would actually indicate that PA has turned aggressively against the drilling industry–sending the clear signal the Keystone State prefers drillers to operate elsewhere, in other states. Fortunately, with Republicans in control of both the House and Senate, this “misguided proposal,” as the Marcellus Shale Coalition calls it, is DOA…
Read More “PA RINO Wants to Slow Marcellus Drilling with $2M Bond per Well”
Accidents | Energy Services | Industrywide Issues | Pennsylvania | Pipelines | Spectra Energy | Statewide PA | Westmoreland County

Repair Work on Exploded Texas Eastern Pipeline in PA 25% Done
August 31, 2016September 1, 2016

9/1/16 UPDATE: Spectra Energy contacted MDN and sent us a copy of their progress report on repairs to the section of the TETCO pipeline known as the Penn-Jersey System. Thank you! We have included a copy of their progress report below.

An update on Spectra Energy’s Texas Eastern Transmission’s (TETCO) “Delmont Line 27” which exploded in Westmoreland County, PA on April 29 (see Texas Eastern Pipeline Explodes near Pittsburgh, Antis Celebrate). We previously told you that not only was Line 27 out of commission, so too were three other pipelines running through the same corridor, meaning 1 billion cubic feet of natural gas per day is not reaching certain mid-Atlantic markets (see Update on Spectra Pipeline Explosion Near Pittsburgh). The early evidence points to corrosion along welded seams, although the jury is still out and the exact cause may not be known for months (see Preliminary Guess on TETCO Pipeline Explosion Cause: Corrosion). One of the four lines that was offline (Line 19) was examined and certified by the Pipeline and Hazardous Materials Safety Administration (PHMSA) in early May to go back online (see TETCO Pipeline Up & Running Post-Explosion; Antis Exploit Accident). However, the other three lines have remained idle pending further investigation (see TETCO PA Pipeline Explosion Still Limiting NatGas Flow Month Later). In June Spectra said they expect to have the full system operating again by November 1st (see Ruptured TETCO Pipeline in PA Offline Until November). How is the effort going? Spectra has completed the initial analysis and is now digging up pipelines in various locations…
Read More “Repair Work on Exploded Texas Eastern Pipeline in PA 25% Done”
Dominion Energy | Energy Services | Industrywide Issues | Maryland | Pennsylvania | Pipelines | Regulation | Statewide MD | Statewide PA | Statewide VA | Virginia

FERC OKs 6 Dominion Compressor Station Upgrades in PA, MD, VA
August 31, 2016August 31, 2016

Dominion Leidy South – click for larger version

It’s not often we miss reporting on a pipeline upgrade project in the Marcellus/Utica. This is one of those rare cases. Over a year ago Dominion Transmission, Inc. (DTI) filed an application with the Federal Energy Regulatory Commission (FERC) to upgrade six compressor stations along the DTI pipeline system in Pennsylvania, Maryland and Virginia. The upgraded compressors would allow DTI to pump an additional 155,000 dekatherms per day of natural gas, providing that gas to new and expanding natgas-fired electric generating plants. The project will cost $210 million. The new news for the project is that FERC approved it this week, granting DTI a certificate to move forward with the upgrades. Below is information about the project, and about FERC’s approval…
Read More “FERC OKs 6 Dominion Compressor Station Upgrades in PA, MD, VA”
Industrywide Issues | Pennsylvania | Regulation | Statewide PA | Wastewater

EPA Shale Wastewater Rule Will Crush PA’s Conventional Drillers
August 30, 2016August 30, 2016

In June MDN reported on yet another new unlegislated law (called a “rule”) issued by the rogue federal Environmental Protection Agency (EPA) that bans the disposal of wastewater from oil and gas drilling via public wastewater/sewage treatment plants (see EPA Bans Disposal of Frack Wastewater at Public Sewer Plants). The rule is meant to ban wastewater coming from unconventional (shale) wells, and not conventionally drilled oil and gas wells, which are shallow wells compared to shale wells. However, conventional drillers in Pennsylvania are raising the alarm that the way the rule is written, it will prevent them from disposing their shallow (and much lower volumes of) wastewater by carting it to the local sewage treatment plant–as many of them do now. The upshot is that the EPA needs to revise its rule…
Read More “EPA Shale Wastewater Rule Will Crush PA’s Conventional Drillers”
Industrywide Issues | Pennsylvania | Regulation | Statewide PA

PA House Holds Hearing on Regulations for Conventional Drilling
August 30, 2016August 30, 2016

Recently a group of 12 Pennsylvania state representatives held a hearing in Armstrong County, PA on the topic of separate regulations for PA’s small conventional vs large shale drillers. You may recall that new drilling rules from the state Dept. of Environmental Protection (DEP) have been approved for shale drillers, called Article 78a, but not for conventional drillers, called Article 78 (see New PA Drilling Regs Closer to Reality, Questions Remain). PA’s conventional drillers say regs for shale drillers are far too strict for small conventional drillers and will drive them out of business. Radical environmental groups, like PennFuture, actually want that outcome, mouthing platitudes that super-strict regulations “may hurt some businesses but create opportunities for others”–so it all balances out in their ethereal pretend world. Here’s some of the comments from the recent House Majority Policy Committee hearing held in Armstrong County…
Read More “PA House Holds Hearing on Regulations for Conventional Drilling”
Economic Impact | Ethane | Industrywide Issues | Jobs | Pennsylvania | Processing Plants | Statewide PA

A SECOND Ethane Cracker Coming to Pennsylvania? Maybe!
August 29, 2016August 29, 2016

Last week MDN reported that Dennis Davin, Secretary of the Pennsylvania Department of Community and Economic Development (DCED) had gone on a roadshow to three counties that will be most affected by Shell’s ethane cracker plant planned for Beaver County (see PA Econ Dev Secretary Hits Road to Promote Shell Cracker). Of course one of those counties was Beaver. Davin addressed a forum in Beaver last Tuesday. What we’re just learning now is that, at the Beaver forum, there was brief talk about a SECOND ethane cracker for Pennsylvania. You read that right. There are no concrete plans as yet, but the scuttlebutt is that an unnamed company is scouting PA for a second cracker plant. According to Davin, his agency has “heard rumblings” but “nothing more.” However, following Davin’s appearance in Beaver and the talk of a second cracker, the DCED issued a statement clearly meant to stoke those rumors…
Read More “A SECOND Ethane Cracker Coming to Pennsylvania? Maybe!”
Industrywide Issues | Lease & Royalty Payments | Pennsylvania | Regulation | Statewide PA

PA Landowners, Drillers Fight over HB 1391 Minimum Royalty Bill
August 29, 2016August 29, 2016

Rep. Garth Everett

It appears that legislation in the Pennsylvania House of Representatives, House Bill (HB) 1391 that would fix the issue of landowners getting shorted in royalty payments, is about to die. It’s not the first time a bill meant to ensure landowners get a minimum of 12.5% in royalties has died in the PA legislature. Bradford County Commissioners chairman Doug McLinko is blaming the Marcellus Shale Coalition and other drilling industry groups. And he’s not a happy camper. Last June MDN told you about a renewed effort by Pennsylvania State legislators to pass a minimum royalty bill that will guarantee PA’s landowners get at least 12.5% royalties (see New Bill HB 1391 Will Guarantee PA Landowners 12.5% Royalties). HB 1391 is was introduced by State Rep. Garth Everett, a Republican from Lycoming County, PA. Everett said in June the new bill was “narrowed” in focus from a previous bill (that had failed) and because the more narrowed focus, he hoped the Marcellus industry would not oppose it this time around. Everett was dead wrong. As we reported in June, the rift between landowners and drillers on the matter of minimum royalties continues (see Rift Continues Between Drillers & Landowners re Royalty Bill). Due to some hard work by Everett, the bill finally moved out of committee where it had been stalled, and on to the full House for a vote (see Progress: PA Minimum Royalty Bill Heads to Full House for Vote). But now the bill is stalled in the full House and it appears there will not be a vote by the end of the fall session, due to close in another two weeks…
Read More “PA Landowners, Drillers Fight over HB 1391 Minimum Royalty Bill”
Allegheny County | Beaver County | Economic Impact | Energy Companies | Ethane | Industrywide Issues | Jobs | Pennsylvania | Shell | Statewide PA | Washington County

Washington County, PA Panel Talks Marcellus, Cracker & the Future
August 26, 2016August 26, 2016

A banker, a real estate developer and a natural gas drilling company rep walk into a bar… No wait! This isn’t a joke! A banker, a real estate developer and a natgas drilling rep were panelists at seminar held yesterday, organized by the Pittsburgh Business Times. Even though there has been a major slowdown in Marcellus/Utica drilling, all three panelists were upbeat and optimistic–in no small part because of the coming Shell ethane cracker in nearby Beaver County. One comment made about the Shell cracker: “We’re not just building a facility; we’re building an industry.” That’s just how major the Shell project will be in the greater Pittsburgh area. Another comment: “The Marcellus Shale is not in the tank…It has slowed down, which is typical of industries that are sensitive to price cycles, [but] it’s consistent, affordable and is stable.” More interesting tidbits from the PBT soiree…
Read More “Washington County, PA Panel Talks Marcellus, Cracker & the Future”
Economic Impact | Industrywide Issues | Pennsylvania | Pipelines | Statewide PA

4 Pipelines Critical to Future of PA’s Marcellus Industry
August 25, 2016August 25, 2016

Gene Barr is the president and CEO of the Pennsylvania Chamber of Business and Industry. The PA Chamber is a big supporter of the Marcellus industry. Writing a column that appears in a recent edition of the York Dispatch, Barr gives full-throated support to three pipelines “critical” to PA’s future: Williams’ Atlantic Sunrise; Sunoco Logistics’ Mariner East 2; and UGI Energy Services’ PennEast. We really liked Barr’s column (read it below). However, we would add a fourth pipeline to his list of critically important pipelines for PA drillers: the Williams Constitution Pipeline. While the three projects Barr names will be mostly built in PA, the Constitution Pipeline will be mostly built in New York State. We suppose that’s all we have to say for you to know why that project is in trouble. At any rate, here’s the reasons Barr offers for supporting the three pipelines he mentions in his column, reasons that equally apply to the much-needed Constitution Pipeline too…
Read More “4 Pipelines Critical to Future of PA’s Marcellus Industry”
Electrical Generation | Energy Services | Industrywide Issues | Pennsylvania | Pipelines | Statewide PA | UGI Energy Services

UGI Breaks Ground on Sunbury Pipeline for NEPA Electric Plant
August 25, 2016August 25, 2016

Sunbury Pipeline – click for larger version

In December 2014 Pennsylvania utility company UGI pre-filed an application to build a new 35-mile pipeline to feed a natgas-powered electric generating plant in Snyder County, PA (see UGI Pre-Files with FERC for New Marcellus Pipeline in Central PA and UGI Building 35-Mile Pipeline for Panda Power Electric Plant). The project is estimated to cost $150 million. It took long enough, but in May the Federal Energy Regulatory Commission (FERC) finally approved the project, with the seemingly impossible prospect it would be built by this November (see UGI Sunbury Pipeline Gets FERC Approval, Built by November?). The 20-inch Sunbury Pipeline will start in Lycoming County and travel through Montour, Union, and Northumberland counties, cross the Susquehanna River and ending up at Hummel Station Plant in Shamokin Dam in Synder County. On Wednesday, UGI broke ground on the new pipeline. The impossible just became possible!…
Read More “UGI Breaks Ground on Sunbury Pipeline for NEPA Electric Plant”